Tax deduction for hybrid auto

Yes. There is a deduction. President Obama’s stimulus bill provides a modified credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer's vehicles after the manufacturer has sold at least 200,000 vehicles.

This credit is in addition to the Hybrid Auto Credit for vehicles purchased or placed into service after December 31, 2005 which may be eligible for a federal income tax credit of up to $3,400 (see IRS site for list of qualifying vehicles), Credit amounts begin to phase out for a given manufacturer once it has sold over 60,000 eligible vehicles.

Source and more details : http://www.savingtoinvest.com/2009/06/3-money-reasons-to-buy-new-car-t ax.html